Performance for Mining Companies

CONSULTATION DRAFT

Investor Expectations on Human Rights

INTRODUCTION SHARE’s Investor Expectations on Human Rights Performance for Mining Companies (“Investor

Expectations”) outlines what SHARE believes are the most pressing human rights issues for the mining sector

and provides an overview of our expectations of mining companies in meeting their human rights obligations.

More specifically, the overall purpose of the Investor Expectations is three-fold:

To outline corporate policies, systems and processes that we believe are most effective in ensuring

companies meet their human rights obligations;

To highlight areas that have high human rights-related impacts for mining companies and to provide

clarity on our expectations on corporate performance in these areas; and

To provide benchmarks by which we may hold companies to account on their human rights impacts and

obligations.

CONTEXT Human rights are designed to protect and ensure dignity and equality for all human beings.

1 In general, human

rights cover three broad areas:

1. Fundamental Rights on the protection of the bodily integrity or security of the person;

2. Civil and Political Rights, including the right to vote and freedom of expression; and

3. Economic, Social and Cultural Rights, including the protection of the full participation and development

of the person through education, adequate housing and self-determination.

While protecting and fulfilling human rights continue to be the primary responsibility of governments,2

businesses increasingly acknowledge that their operations can have widespread impacts and investors, advocacy

groups and the public expect that they, at minimum, do not infringe on the human rights of employees and local

communities.3 This recognition is embodied in the 2011 Guiding Principles for Business and Human Rights

(“Guiding Principles”) put forward UN Special Representative John Ruggie (see Box 1).

At the same time, more companies recognize that human rights are an important aspect of good risk

management. Companies that adopt mechanisms to address their human rights impacts are better prepared to

prevent human rights abuses and deal effectively with any allegations of complicity.

For companies and their shareholders, the benefits of mitigating human rights risks include:

Reduced likelihood of reputational damage due to poor human rights practices;

Improved staff morale, higher productivity and the increased ability to attract and retain the best

employees;

Stronger ‘social licence to operate’ by avoiding costly strikes, protests and boycotts;

1 See Appendix 1 for a list of international agreements on human rights and international corporate best practice standards that have

helped inform this document 2 International human rights law requires governments to respect, protect and fulfil human rights through domestic laws, including

protecting individuals against human rights abuses by third parties such as corporations. 3 For example, a 2006 Survey of Global Fortune 500 companies found that 9 out of 10 companies responding to the survey reported

having human rights principles or management practices in place; a 2007 analysis by UK-based EIRIS found that more than half of the

FTSE 100 listed companies have adopted a human rights policy. See: http://www.humanrights.ch/upload/pdf/070706_Ruggie-survey-

Fortune-Global-500.pdf and http://www.eiris.org/files/press%20releases/undhrdec07.pdf

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A more stable operating environment through the

promotion of effective and respectful community relations;

and

Greater competitive advantage in contract bidding and

negotiations and in attracting investment capital.

Conversely, companies that fail to manage human rights risks may:

Be found complicit in human rights abuses and be

implicated in costly lawsuits;

Incur higher security and insurance costs;

Face boycotts and damaging public campaigns;

Experience a loss of shareholder confidence; and

Experience diminished share price and investment

returns.4

RATIONALE SHARE’s Investor Expectations on Human Rights Performance

For Mining Companies reflects the growing requirement among

investors that the companies in which they invest respect

internationally recognized human rights. We have chosen a focus

on the mining sector for three principal reasons.

First, mining and energy accounts for the third-largest component

of Canadian direct investment abroad; in 2008, over 75 per cent of

global exploration and mining companies were headquartered in

Canada; and in 2010, mining and energy represented 48.6% of the

Toronto Stock Exchange (TSX) by market cap.5 Institutional

investors with Canadian public equity investments are therefore

likely to be exposed to human rights-related risks in their

portfolios as a result of the large proportion of mining and energy

companies trading on the TSX.

Second, companies in the global mining sector have extensive

operations in weak-governance zones, where host governments are

either unwilling or unable to effectively regulate business in line

with human rights principles. Finally, despite the alignment of

corporate human rights due diligence systems in line with the

Guiding Principles, the Canadian mining industry and its

international peers have demonstrated limited progress in

assessing, reporting and managing human rights outcomes and

impacts. The presence of strong policies or outward commitments

does not provide sufficient information for investors to assess how

4 For example, Lonmin plc, a producer of platinum group metals operating in South Africa, experienced a five per cent drop in share price

after one hundred striking employees were shot by South African police officers at the company’s Marikana mine in August 2012. As of

August 30, 2012, the company’s share price had not reached its pre-strike value. 5 Foreign Affairs and International Trade Canada. March 2009. Building the Canadian Advantage: A Corporate Social Responsibility

Strategy for the Canadian International Extractive Sector. Available online at: http://www.international.gc.ca/trade-agreements-accords-

commerciaux/ds/csr-strategy-rse-stategie.aspx?view=d. See also, Pricewaterhouse Coopers, December 10, 2010, “20 reasons why this

was a banner year for Canada’s capital markets.” Available online at: http://www.pwc.com/ca/en/media/release/2010-12-10-canada-

capital-markets.jhtml

BOX 1. The UN Guiding Principles for

Business and Human Rights In July 2005, former UN Secretary-General

Kofi Annan appointed Professor John Ruggie

as his Special Representative on Human Rights

and Transnational Corporations and Other

Business Enterprises. In June 2011, the United

Nations Human Rights Council unanimously

endorsed the Guiding Principles for Business

and Human Rights (“Guiding Principles”) put

forward by the Special, which clearly outlined

that business enterprises should avoid

infringing on the human rights of others and

should address adverse human rights impacts

with which they are involved.

These Guiding Principles provide a common

baseline from which companies and investors

can develop and implement greater coherence

and guidance in human rights management

systems. At minimum, Ruggie recommends the

following key elements to ensure effective

corporate human rights due diligence systems:

1. Develop and adopt human rights policies

which are approved by senior management;

2. Assessing impacts through human rights

risk mapping and feedback;

3. Integrate respect for human rights through

training and capacity development;

4. Track and report on human rights

performance; and

5. Develop effective and transparent grievance

systems.

Source: UN Human Rights Council. 2011. Guiding principles on business and human rights: Implementing the

United Nations “Protect, Respect and Remedy”

Framework.” Available online at: http://www.business-humanrights.org/media/documents/ruggie/ruggie-guiding-

principles-21-mar-2011.pdf

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companies are managing the risks associated with human rights. Consequently, in addition to outlining our

expectations in terms of corporate policies and governance processes, this document offers guidance for

companies on specific human rights outcomes and impacts.

INVESTOR EXPECTATIONS ON HUMAN RIGHTS IN THE MINING SECTOR The Investor Expectations are divided into three sections: Part 1 outlines the governance structures, policies,

management systems and processes that are fundamental to effectively managing human rights risks; Part 2

identifies areas where we believe mining companies face particular challenges in respecting human rights and

mitigating negative human rights impacts; and Part 3 provides an overview of four focus areas for SHARE’s

human rights engagement program.

PART 1: Governance, Policies, Systems and Processes

Company governance structures, policies, management systems and processes create the foundation for

addressing the full range of corporate human rights obligations and impacts across companies’ operations.

The Investor Expectations are informed by the Guiding Principles and the United Nations Global Compact

Management Model.6

Governance Framework

Corporate governance encompasses company management systems and processes aimed at identifying,

mitigating and preventing human rights-related business risks. These systems and processes include those

elements that guide company personnel in identifying and responding to human rights challenges, and ensures

corporate transparency and accountability on performance (see Table 1). Strong corporate governance practices

applied to human rights impacts and obligations enables companies to demonstrate proactive extra-financial risk

management to its shareholders and establish mechanisms to support long-term dialogue and trust with affected

stakeholders.

TABLE 1: Key Indicators for a Human Rights Governance Framework

Fundamental

Elements

Regular reporting to board from senior management on human rights exposure, impacts and

risk areas

Identification of indicators to track human rights performance

Clear reporting channels and decision-making structures between operational-level

management, corporate management and the board to respond to human rights incidences or

situations involving the company

Appropriate disclosure to shareholders and other stakeholders on human rights performance

Key Processes

Assessment of human rights exposure at a global operations level and at a project level as a part

of overall risk management strategy

Assessment of human rights impacts at the country and operational level

Procedures to measure human rights performance, tracking progress and integrating lessons

learned into revised policies and management systems

Integration of human rights performance into management evaluation including as criteria for

bonuses and advancement opportunities

Policy Framework

Policies approved by the highest level of management are an important means by which companies express

commitment to meeting their responsibility to respect human rights. While companies need not adopt a separate

6 The UN Global Compact Management Model provides guidance to companies on how to incorporate human rights into their business

operations and management systems. It can be accessed at:

http://www.unglobalcompact.org/docs/news_events/9.1_news_archives/2010_06_17/UN_Global_Compact_Management_Model.pdf

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human rights policy statement, they need to be clear and transparent about their vision, commitments and overall

approach to respecting human rights. This may be achieved by incorporating human rights concerns into Codes

of Conduct, Corporate Social Responsibility and/or Sustainability programs and other voluntary initiatives

including explicit reference to health and safety, labour rights, non-discrimination, diversity and inclusion, and

community engagement.

TABLE 2: Key Indicators for a Corporate Human Rights Policy

Fundamental

Elements

Broader policy (or otherwise stated) commitment to sustainability, social responsibility and/or

business conduct

Stand-alone human rights policy or substantial content on human rights in corporate

sustainability and/or social responsibility policies

Policy includes information on board-level and management accountability for the

implementation and effectiveness of policy

Policy framework includes explicit commitment to respect all human rights, including labour

rights, with reference to international human rights standards

Key Processes

Process in place for assessing, monitoring, reviewing and revising relevant policies that

includes participation of relevant stakeholders

Process for communicating about human rights policies across the company including training

initiatives

Process to make the policy accessible such as ensuring that the policy is available in relevant

languages

Reporting processes in place to disclose information about human rights policies to external

stakeholders

Management Framework

Companies should integrate human rights into management systems to ensure that potential human rights

impacts are identified and addressed in a timely manner (see Table 3). Relevant management systems include

human resources, labour relations, risk management, performance assessment, operational audits,

communications and stakeholder relations. In addition, stand alone management systems should be devised to

specifically address human rights risks including processes for identifying and assessing human rights impacts

(i.e. human rights impact assessments) as well as processes to ensure that all stakeholders have access to

functional, transparent and effective grievance systems.

TABLE 3: Investor Expectations for a Human Rights Management Framework

Fundamental

Elements

Training provided to all relevant personnel on human rights dilemmas, situations and scenarios

Procedures in place to identify early signs of potential infringements of human rights

Accessible grievance mechanisms established for all potentially affected stakeholders7

Clear steps to remedy situations where companies are responsible for, or implicated in a human

rights violation

Key Processes

Training curriculum developed to be context and audience specific with input from relevant

internal and external stakeholders

Integration of human rights across the company including inclusion in operational policies and

procedures, job descriptions and communication materials, for example

Clear communication channels between operational management, corporate headquarters and

7 For more information, see UN Human Rights Council. 2011. Guiding principles on business and human rights: Implementing the United

Nations “Protect, Respect and Remedy” Framework.” Available online at: http://www.business-

humanrights.org/media/documents/ruggie/ruggie-guiding-principles-21-mar-2011.pdf

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BOX 2: Free, Prior and Informed Consent

Free, Prior and Informed Consent (FPIC) refers to a

decision-making process that is:

Free: Indigenous peoples are not coerced,

pressured or intimidated in their choices of

development;

Prior: Their consent is sought and freely given

prior to the authorization and start of development

activities;

Informed: Indigenous peoples have full

information about the scope and impacts of the

proposed development activities on their lands,

resources and well-being;

Consent: Their choice to give or withhold

consent over developments affecting them is

respected and upheld. The terms “consent” and

“engagement” should not be used interchangeably

as consent is a heightened or extra layer added to

the engagement processes and includes a more

formalized process and outcome.

Source: See Vivianne Weitzner. 2009. Bucking the Wild West –

Making Free, Prior and Informed Consent Work. Available online at: http://www.nsi-

ins.ca/english/pdf/PDAC_FPIC_%20panel_%20feb_%202009.pdf;

and Amy Lehr and Gare Smith. 2010. Implementing a Corporate Free, Prior, and Informed Consent Policy: Benefits and Challenges.

Foley Hoag LLP. Available online at:

http://www.foleyhoag.com/NewsCenter/Publications/eBooks/Implementing_Informed_Consent_Policy.aspx

the board to respond to human rights situations

PART 2: Key Human Rights Issues for Mining Companies

This section provides a high level overview of key areas where human rights issues commonly affect mining

companies.

Labour

All companies have direct and immediate influence on workers’ rights and must work to ensure that they comply

with all labour-related human rights expectations, including the right to non-discrimination, the right to not be

subjected to slavery, servitude or forced labour, the right to freedom of association and the right to a safe

working environment. Expectations regarding recognition of labour rights are described in more detail in Part 3.

Security Protocols

Mining companies face the difficult challenge of protecting personnel and property in a way that respects human

rights and the security of local communities. Companies that use private security firms to protect employees and

property must define the company’s standards and expectations clearly and include these as part of the

contractual obligations with the security company.8 In addition, mining companies should review training

materials to ensure that guidance is provided on what is expected of security personnel in particularly sensitive

situations such as community demonstrations against projects, for example. Companies should also have clear,

country-specific guidelines on how it will interact with public security forces. These guidelines should be

developed in consultation with relevant authorities to ensure clarity around the expectations and obligations of

both parties.

Conflict Zones

Mining companies often operate in areas of civil conflict and social upheaval, which can make them particularly

vulnerable to a range of human rights risks. For instance, conflict situations can put personnel in greater danger

in terms of their personal safety; governments may use

taxes and royalties paid by companies to sustain civil

conflict and commit human rights abuses; and company

infrastructure may be at greater risk of appropriation in

the context of civil conflict and political instability.

Companies may also become directly or indirectly

implicated in human rights abuses. Companies must

ensure that they prepare for any conflict-related risk, are

not complicit in human rights abuses and proactively

prevent the use of tax revenues to fund violence through

industry initiatives such as the Extractive Industries

Transparency Initiative (EITI)9, for example.

Community Consultation

Companies have a responsibility to respect human rights

through ongoing consultation with and information

disclosure to any potentially affected peoples. Failure to

engage in open and constructive dialogue with

8 For specific guidance, see Multilateral Investment Guarantee Agency, World Bank Group, 2008, Voluntary Principles on Security and

Human Rights: An Implementation Toolkit for Major Project Sites. Available online at:

http://www.miga.org/documents/VPSHR_Toolkit_v3.pdf. 9 For more information on the EITI, please see: http://eiti.org/eiti.

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communities may aggravate social conflict, impact company operations through blockades, increase the potential

for violence, result in the loss of the social license to operate and negatively impact corporate reputation.

Consultations must be continuous, transparent, open and well documented and accessible to all affected

individuals, to those potentially affected and to all interested stakeholders. Prior consultation is a fundamental

element of indigenous peoples’ rights and companies should provide, to the degree possible, accurate and

complete information of the potential impacts of operations prior to exploration. Grievance mechanisms should

be put in place to ensure that communities have recourse to voice concerns. Affected and potentially affected

stakeholders should be provided with the time and resources to examine environmental impact assessments and

any mining-related plans and protocols, and companies should respect communities’ right to withhold consent.

See Part 3 for specific human rights obligations related to indigenous peoples.

Artisanal And Small-Scale Mining

Currently, few international standards on corporate procedures respond to human rights issues related to artisanal

and small-scale mining. However, companies can anticipate and avoid conflicts by developing policies to

responsibly deal with any disputes with artisanal and small-scale miners who may be operating without legal

title. It is also in the interest of mining companies to work proactively and in partnership with government

agencies, advocacy groups and non-governmental organizations to promote the organized development and

control of such practices in ways that complement large-scale mining and respect human rights related to

security and safe work.

Bribery and Corruption

Companies frequently engage in discussions with government officials in an effort to establish or sustain

operations. Employees may encounter bribery issues when they operate in areas where bribery is common

business practice. Regional and country-level risk assessments should include an evaluation of risks related to

levels of bribery and corruption, and inform corporate practices around how to handle such situations. This

includes developing policies and guidelines for employees in order to prepare them on how to deal with bribery

and corruption, especially those involved in legal matters or discussions with government officials. If companies

cannot avoid exchanging gifts or small payments to officials, the amounts paid and detailed explanations for

each relevant incident should be recorded.10

Environmental Impacts

Mining operations can generate extensive environmental impacts that may have negative implications for local

communities as a result of, for example, contaminating water resources or land. These negative impacts can

increase the potential for conflict with local communities and are therefore an important human rights issue that

companies need to consider alongside more traditional human rights concerns. The environmental impacts of

mining operations are of particular concern in countries where environmental regulation may be weak and/or

poorly enforced and in contexts where communities rely on ecosystem services for their livelihoods. See Part 3

for specific human rights impacts related to water management.

PART 3: SHARE’s Human Rights Engagement Focus Areas

The following section provides an in-depth examination of four issues that are the focus of SHARE’s human

rights engagement program. They are: labour rights and employment practices, indigenous rights, water

management and land acquisition. These issues were chosen for three principal reasons. First, our research into

company human rights policies and performance has shed light on gaps in how companies are managing these

10 In August 2012, the U.S Securities and Exchange Commission adopted rules under Section 1504 of the Dodd-Frank Wall Act requiring

all US-listed oil, gas and mining companies to disclose payments they make to foreign governments. Similar legislation has been

proposed in Europe. In September 2012, a national-level working group comprised of Canada’s mining industry and NGOs announced

that it had signed a Memorandum of Understanding to improve Canada’s transparency regime as it relates to extractive company

payments to governments. For more information, see: http://www.pdac.ca/pdac/misc/pdf/120906-press-release.pdf

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human rights issues specifically. We also found that company disclosure on the steps that they are taking to

minimize human rights impacts in these areas remains modest. Finally, we believe that companies that

proactively address these four areas will have a stronger social license to operate, better community relations,

improved operational performance and ultimately will deliver better shareholder value.

Human Rights Obligations Related to Labour and Employment Practices

Companies and investors increasingly recognize labour rights as a core component of corporate social

responsibility. At minimum, companies must respect and protect the fundamental labour rights in the

International Labour Organization’s Fundamental Principles and Rights at Work and the rights set forth in all

accords to which the host country is a party. They are also expected to comply with host country laws and

structure their policies and practices to exceed national labour requirements. Despite these regulations and

expectations, companies often do not evenly or consistently respect labour rights across their operations. The

four core human rights obligations related to labour and employment practices are:

Freedom of association: Companies in the mining sector must take particular care to protect the rights of

workers in countries that do not respect international standards regarding freedom of association and

collective bargaining. The company must respect the roles of workers’ organizations and allow them to

function independently. Workers should be allowed the freedom to associate with these organizations for the

purpose of protecting their employment interests. The company should also ensure that it respects the rights

of workers to bargain collectively as well as take special measures to provide a safe environment for workers

who do join or form trade unions and are harassed by non-union co-workers;

Non-discrimination: Companies must treat workers fairly with respect to all employment policies and

conditions, such as advancement, placement, training and remuneration. This is especially relevant for

workers who have been hired from the local community, workers of indigenous descent, female workers and

young workers;

Forced labour: Companies should ensure that they do not use, contract or benefit from the use of forced

labour. This includes ensuring that the company does not benefit from the forced labour of workers

contracted through temporary employment agencies, suppliers, business partners, or government actors;

Child labour: Companies should respect the ILO Minimum Age Convention, which states that the minimum

age of workers not be less than the age of completing compulsory education, and should not be less than 15

years of age. If a mining company operates in a country where national legislation falls below the minimum

of 15 years of age, they must structure that employment so that it does not interfere with the child’s

educational responsibilities. At the same time, companies must make special provisions for young workers

to ensure that the work they are expected to carry out is not beyond their physical capabilities and will not

harm their health or safety. Companies can offer legitimate technical education or vocational training to

young workers. However, companies may not use such programmes to hire young workers into false

apprenticeship programs in order to require equal work but less pay when compared to their adult

counterparts.

TABLE 4: Investor Expectations Related to Labour Rights for Mining Companies

Fundamental

Elements

The presence of labour-related policies including policies on occupational health and safety,

freedom of association and collective bargaining and non-discrimination

Training provided to all personnel on labour rights policies

Procedures in place to identify early signs of potential infringements of labour rights, including

fair remuneration and work conditions for all employees, including eliminating harassment and

ensuring equal opportunities for women and minorities

Procedures to ensure no operation uses forced, compulsory or child labour

Accessible grievance mechanisms established for all workers

Key Processes

Formal human resource systems in place across the operation including processes for collecting

workforce data such as the total number of employees, including employment type, contract and

region

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Employee support programs in place such as education, training, counseling, disease prevention

and risk control to assist workforce members and their families

Measurement and reporting of measures and indicators related to incidents of discrimination,

safety incidents, union representation and employee intimidation among others, including a

description of actions taken

Human Rights Obligations Related to Indigenous Peoples11

Companies must ensure that they respect the rights and interests of indigenous peoples as defined within

applicable national and international laws. They should clearly identify and understand the interests and

perspectives of indigenous peoples when seeking to develop or continue operating mining projects through

culturally appropriate consultation with indigenous communities and other stakeholders. Companies should be

transparent about the potential impacts of mining activities on the community including environmental, social,

cultural, spiritual, and health impacts and, at the same time, work with relevant stakeholders to identify ways to

minimize those impacts.

Companies should also be sure to establish fair compensation levels for socio-economic disruptions, including

those as a result of environmental impacts, and ensure fair distribution of benefits such as wages, royalties and

taxation. It is also important that companies have a clear understanding of land claims and land rights in the

communities where they are, or intend to, operate. In cases where land claims are outstanding or disputed, it is

important for companies to work to resolve the claims or at a minimum work to reach a mutually acceptable

agreement with the community, through for example, legally binding impact-benefit agreements.12

In cases

where consent is not obtained for mining activities, companies must be clear and transparent about the legal

processes used that allowed for effective representation of the communities concerned.

11 FPIC is recognized in the International Labour Organization’s Convention 169 on Indigenous and Tribal Peoples, 1989; the United

Nations Declaration on the Rights of Indigenous Peoples, 2007; and the International Finance Corporation Performance Standards on

Social and Environmental Sustainability. 12 Impact Benefit Agreements are a mechanism employed in Canada by Aboriginal groups and mining companies to outline the projected

negative impacts of a mine project, and steps that will be taken to either a) mitigate these impacts, or b), compensate local people for

losses they will sustain as a result of impacts which can not be mitigated. IBAs also detail the benefits a project will bring to a local

community, and can include guarantees regarding employment, royalty revenues, trust funds, training programs, scholarship programs,

sub-contracting opportunities, etc. See North-South Institute, 2002, Aboriginal Peoples and Mining in Canada: Consultation, Participation

and Prospects for Change. Available online at: http://metisportals.ca/MetisRights/wp/wp-

admin/images/Aboriginal%20Peoples%20and%20Mining%20in%20Canada.pdf.

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Human Rights Obligations Related To Water13

Mining companies use large amounts of water for their operations, which may result in water shortages for

individuals and communities as well as diminished water quality through the potential for heavy metal

contamination and leaching, processing chemicals pollution, erosion and sedimentation, and acid mine drainage.

Companies face different water-related risks depending on the mining processes used and their reliance on water,

the location of mining operations in relation to water sources as well as the regulatory requirements and level of

enforcement. Water-related business risk may include water scarcity, inadequate operation and management of

water systems, poor or aging infrastructure, ineffective regulatory frameworks, competition over water

resources, water pollution as well as long-term risks related to climate change and poor water waste

management.

To ensure sustainable outcomes, corporate water management processes must be monitored regularly and be

able to adapt to changing circumstances. At minimum, investors should determine whether companies are

working to ensure that they do not impact the quantity and availability of water for local communities in the

short or long-term, that water quality is protected, and that water and water facilities and services are accessible

to everyone without discrimination (see Table 6). Companies should have strong environmental management

processes in place to protect water resources, including full information about water users and sources in all

nearby and downstream communities, baseline water quality data, ongoing independent water monitoring and

water-related contingency plans. Effective, long-term water management requires companies to build trust and

have open lines of communication with impacted communities, employees and public and regulatory authorities.

Companies also have the opportunity to proactively support sustainable water management and equitable

outcomes. They may do this by actively engaging with local, national, regional and international efforts to

improve standards and legislation for water regulation and management. In doing so, companies may

demonstrate to communities, regulators and shareholders that they are well-managed, forward thinking and

willing to act on their human rights and sustainability commitments.

13 The following instruments make specific reference to water: the Convention on the Right of the Child, article 24(2)(c), the Convention

on the Elimination of All Forms of Discrimination against Women (CEDAW) article 14(2) and (h), the Convention on the Rights of

Persons with Disabilities article 28(2)(a), the International Labour Organization Convention No. 161 on Occupational Health Services

article 5 and the African Charter on the Rights and Welfare of the Child article (14).

TABLE 5: Investor Expectations Related to Indigenous Peoples for Mining Companies

Fundamental

Elements

Embed FPIC principles within broader indigenous peoples policies

Transparent and culturally appropriate processes to consult with indigenous peoples

Seek consent from indigenous peoples for mining activities

Respect indigenous peoples right to withhold consent

Clear and transparent information on potential impacts of mining activities

Efforts and initiatives to mitigate negative impacts of mining

Fair compensation levels for socio-economic disruption including resettlement

Fair distribution of benefits including wages, royalties and employment opportunities

Key Processes

Human rights impacts assessments that include specific details on impacts to indigenous peoples

Transparent and open disclosure of corporate approaches to engagement and FPIC, including

challenges, failures, successes and lessons learned

Processes to carry out studies, in cooperation with affected indigenous groups, with regards to

social, spiritual, cultural and environmental impacts of mining activities

Corporate disclosure on the following: Resettlement activities undertaken, compensation programs

for impacted persons, and impact of resettlement on access to housing, food, water and overall

development

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Furthermore, given the high social, economic and environmental risks posed by a failure to properly close mines

at the end of their life, guidelines and regulations related to mine closure and reclamation are becoming

increasingly stringent. Companies that fail to properly plan for mine closure face legal and regulatory sanctions

as well as a loss of reputation.

TABLE 6: Investor Expectations Related to Water for Mining Companies

Fundamental

Elements

Commitment that mining operations will not adversely affect water availability, quality and

accessibility

Availability of baseline water quality data

Performance indicators to assess water usage, quality and availability

Presence of a water management plans for all mine sites

Mine closure plans to include processes related to water management and wastewater cleanup

as well as cost estimates for any remediation of water sources

Key Processes

Collect baseline water data at the beginning of all projects

Assessment of water-related risks at each operation

Water management plan devised for each project that outlines key performance indicators and

with input from relevant stakeholders including community leaders, government agencies and

water authorities, for example

On-going water monitoring and sampling with appropriate transparency and disclosure

including access to water quality reports by communities

Human Rights Obligations Related To Land Acquisition

All companies in the resource extraction sector require access to land in order to exploit natural resources and

raw materials. In many countries, some of the land acquired by companies may not be registered under national

systems of land title or may be subject to tradition systems of ownership. Many local community members may

also lack documentation to prove land ownership or land use rights. In some situations, vulnerable groups, such

as elderly women or single women, may not be consulted by relatives prior to selling property and are

consequently deprived of their property rights. Companies must proactively address the challenges related to

legal and customary rights to land, including individual and collective rights, fair land pricing and informed

consent by all property-rights holders during the land selling process.

Human rights violations and abuse may also take place in situations where companies request that the military or

police forcibly evict people from their land. Mining companies must make every effort to avoid or minimize

involuntary resettlement by exploring alternative options including continuing engagement with communities

and/or making adjustments to the project design. If relocation is unavoidable companies have an obligation to

mitigate adverse social and economic impacts from land acquisition or restrictions on impacted persons’ use of

the land by providing compensation for loss of assets and ensuring that all resettlement activities are

implemented with appropriate consultation and the informed participation of those affected. The company must

also provide adequate housing with security of tenure at resettlement sites and provide improved standards of

living of displaced persons (see Table 7).

For indigenous peoples, access to land and natural resources is important for economic reasons as well as for

cultural, spiritual and religious activities. Companies that do not recognize the integral value of land to

indigenous people run the risk of amassing community opposition to projects on the basis of cultural

insensitivity to the actual or perceived negative impacts of mining operations on those values. Mining companies

must ensure that their approach to land acquisition does not impact affected peoples’ basic rights to life, to

personal integrity, to food, to water, to a dignified existence, to health, to education, to equality before the law, to

property, to seek, receive and impart information, to peaceful protest and to adequate standards of housing.

Companies should also be transparent about their intentions to acquire land and clear about company policies to

compensate those who might suffer economic losses. Open and fair consultation processes, accessible grievance

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mechanisms and non-discrimination between individuals are important characteristics of sound land acquisition

policies and processes.

TABLE 7: Investor Expectations Related to Land Acquisition for Mining Companies

Fundamental

Elements

Policies and commitments to minimize involuntary resettlement wherever possible

Implementation of structures to ensure non-participation from improper forced land relocations

and commitment to fair remuneration for acquired land

Accessible grievance mechanisms established for all potentially affected stakeholders

Key Processes

Assessment of land ownership and registration systems as well as land use patterns for each

operation

Consultation with all affected parties, including both legal and customary owners of the land

prior to acquisition

Provision of compensation for loss of assets at replacement cost, including restoring or

improving living conditions of displaced persons

CONCLUSION The mining sector has an important role to play in the protection and promotion of human rights. SHARE’s

Investor Expectations on Human Rights Performance for Mining Companies outlines what we believe are

realistic expectations of mining companies with regards to their human rights obligations. The Expectations also

identify opportunities for investors to engage with companies to improve governance structures, policies and

management systems for human rights and ultimately to achieve better human rights outcomes. We believe that

the most successful mining companies can demonstrate their commitment to respecting and protecting human

rights through the governance structures, policies and management systems they have in place and their

performance in specific areas such as labour rights, relationships with communities and indigenous peoples,

water management and land acquisition. Moreover, our belief is that companies that perform well in these areas

have stronger reputations, a more secure social license to operate, reduced potential for legal liabilities and

ultimately better financial performance.

13

APPENDIX 1: International Human Rights Agreements, Conventions and Best Practice

Resources

Key International Human Rights Agreements, Conventions and Standards

1. International Bill of Human Rights

The Universal Declaration of Human Rights, 1948

The International Covenant on Economic, Social & Cultural Rights, 1966

The International Covenant on Civil and Political Rights, 1966

2. The International Labour Organization’s Core Conventions

Freedom of association and the effective recognition of the right to collective bargaining (Conventions 87 &

98)

Effective abolition of child labour (Conventions 138 & 182)

Elimination of all forms of forced or compulsory labour (Conventions 29 & 105)

Elimination of discrimination in respect to employment and occupation (Conventions 100 & 111)

3. Other International Conventions of Relevance

The International Labour Organization’s Convention 169 on Indigenous and Tribal Peoples, 1989

The United Nations Declaration on the Rights of Indigenous Peoples, 2007

The Convention on the Elimination of All Forms of Discrimination against Women, 1979

4. International Standards on Business and Human Rights

The United Nations Guiding Principles for Business and Human Rights

The International Finance Corporation Performance Standards on Social and Environmental Sustainability

The OECD Guidelines for Multinational Enterprises

The International Labour Organization’s Tripartite Declaration of Principles Concerning Multinational

Enterprises and Social Policy

International Labour Organization’s Fundamental Principles and Rights at Work

The United Nations Global Compact

PHOTO: TURDA SALT MINES, ROMANIA, PHOTO TAKEN BY MONICA TODERIC

WEBSITE: http://www.flickr.com/photos/monerique/